Fed cuts bond purchases by further $10bn January 29, 2014 THE FEDERAL Reserve last night announced it would trim the US quantitative easing (QE) easing programme by another $10bn (£6.03bn) next month, the second month of winding down the central bank’s policy. In his last meeting as Fed chair, Ben Bernanke had unanimous agreement for the decision, which cuts asset purchases from $75bn currently to [...]
London Report: Volatility hurts FTSE as it drops to six-week low January 29, 2014 THE UK’S top share index fell to six-week lows yesterday, on investor concern about the effect a further reduction of US monetary stimulus would have on emerging markets. Investors have been on edge in the past days as unease about Chinese growth and the withdrawal of US monetary stimulus spread from emerging-market currencies to the [...]
New York Report: Wall St falls further after Fed decision January 29, 2014 STOCKS dropped more than one per cent yesterday, hitting session lows after the Federal Reserve stuck with its plan to scale back stimulus even in the midst of emerging market turmoil. With the day’s decline, the S&P 500 is down four per cent for the month – its worst monthly loss since May 2012. Some [...]
Forget the EM crisis. Fed tapering will leave France without a paddle January 29, 2014 Emerging markets continue to feel the pain of the Federal Reserve’s taper, but trouble could be rapidly approaching for another struggling economy – France. Research by Rabobank, looking at narrowing spreads in the Eurozone periphery, concluded that economic fundamentals are set to be an increasingly important driver of capital markets as the taper progresses. And [...]
What you need to know before the open – 29/01 January 29, 2014 European bourses are expected higher this morning, ahead of the Fed’s Open Market Committee meeting and in the wake of Turkey’s rates hike. Over in Asia, the Nikkei leapt the most in five months on the news that Turkey has increased interest rates from 7.75 per cent to 12 per cent. Post a measurable [...]
Turkey stuns global markets with rate hikes January 28, 2014 THE TURKISH central bank has hiked rates dramatically in a bid to stabilise the value of its currency. In a shock announcement at midnight Ankara time, the bank raised its overnight lending rate to 12 per cent, up from 7.75 per cent, and upped its overnight borrowing rate from 3.5 to eight per cent. It [...]
Federal Reserve’s selfishness triggered emerging markets chaos January 28, 2014 IF you want to know what old fashioned, hard-core monetary policy used to look like – the kind that those readers who lived through the UK’s European Exchange Rate Mechanism (ERM) humiliation will remember – look no further than what happened to Turkey, a country at the epicentre of the growing emerging market crisis, last [...]
London Report: FTSE buoyed by fall in emerging market worries January 28, 2014 THE UK’S blue chip share index picked up yesterday from five-week lows after finding strong technical support in the face of easing tensions in emerging markets and prospects of mergers and acquisitions. Emerging market assets steadied after a three-day slump, reviving confidence in global risk assets and reassuring investors worried that companies will be hit [...]
The grave crises facing Putin’s Russia lay bare its fundamental weaknesses January 28, 2014 CHAOS in Kiev must feel uncomfortably close to Russian President Vladimir Putin. The Ukrainian parliament yesterday annulled laws that sought to clear the streets of protesters against Ukraine’s increasingly authoritarian pro-Russian President Viktor Yanukovych. Ukraine’s prime minister and government have quit, and the country stands perilously on the edge of deeper conflict – prompted initially [...]
Nearly 80pc of economists believe that Bernanke’s QE1 will be seen positively by the history books January 28, 2014 It's often said that it's hard to find agreement among economists. That's taken to be especially true when you approach the more heavily politicised areas of the discipline – such as macro policy. So that 78 per cent of economists agree with this statement is quite a surprise: Informed postmortems of Ben Bernanke’s Fed chairmanship [...]